The U.S. current-account deficit sank to the lowest level in more than 14 years at the end of 2013, reflecting a smaller trade gap and better returns on assets Americans own abroad.

The broad measure of international transactions registered a shortfall of $81.12 billion in the fourth quarter of last year, the Commerce Department said Wednesday. It was the smallest deficit since the third quarter of 1999.

The gap, which has narrowed 20% from a year earlier, now represents 1.9% of U.S. gross domestic product. That’s the smallest shortfall as a share of the U.S. economy since 1997. Read More »

Which countries in emerging Asia are most exposed to outflows of capital? Economists often look to large current-account deficits as a sign of vulnerability — but a broader measure of funding needs might provide a better gauge.

The chart shows gross external financing requirements – the current-account balance combined with liabilities due over the next 12 months – as a proportion of reserves.

Indonesia and India, which run the largest current account deficits in Asia, come in at the bottom of the gross external financing metric too. There’s “little doubt” those two countries will remain under investor scrutiny this year as the U.S. Federal Reserve reduces its bond purchases, Deutsche Bank’s chief Asia economist says. Read More »

Thailand is discovering that putting the populist genie back in the bottle is harder than letting it out.

Since introducing a multi-billion dollar subsidy for the country’s rice farmers in 2011, the country has seen a plethora of other special interest groups demand handouts of their own. Among them, rubber planters this month staged running battles with riot police in southern Thailand in their bid to secure higher minimum prices for their harvests.

Now the country’s corn farmers are getting in on the act, last week blocking roads in northern Thailand, and raising questions among economists over whether Prime Minister Yingluck Shinawatra’s government will be able to roll back the scale of its handouts – and what the consequences might be if it doesn’t. Read More »

The U.S. current account deficit narrowed to a four-year low, partly reflecting the country’s diminishing appetite for foreign oil.

The current account deficit, the broadest measure of U.S. international transactions, decreased to $98.89 billion in the second quarter of the year, the Commerce Department said Thursday, the lowest level since the third quarter of 2009. The U.S. has to borrow from overseas to make up the gap in trade and financial transactions.

Petroleum imports from April to June fell to the lowest level since the end of 2010. A U.S. energy boom has boosted domestic production of oil and natural gas and curtailed demand for overseas products.

U.K. Prime Minister David Cameron on Friday hailed the results of this week’s summit of Group of 20 industrial and developing nations as moving forward in addressing the issue of global economic imbalances.

Speaking at the end of the G-20 Seoul leaders summit, Mr. Cameron said “I think real progress has been made.” He said it was clear that the G-20 was “determined” to avoid a return to 1930s protectionism and currency wars, noting the communiqué’s pledge to push ahead on an ambitious Doha trade deal and an agreement to move forward with the G-20 Mutual Assessment Process, a road map for the global economy.

Mr.Cameron said that crucially, U.S. President Barack Obama had told other G-20 leaders that he would seek to “take a deal forward” if a “balanced” Doha deal can be achieved. The long-stalled Doha round of talks were started in 2001 in the Qatari capital with the aim of increasing global prosperity through trade.

Mr. Cameron acknowledged that the global imbalances problem won’t be resolved overnight and that he would like to see China moving faster on rebalancing its economy toward domestic demand. But he said “actually there is progress…Slowly, slowly, China is moving into a position of actually… rebalancing its economy.”

The prime minister added that currency rates should reflect economic fundamentals. Asked what the British public would get out of this week’s G-20 meeting, he said the U.K. has a lot of at stake on issues like trade promotion and ensuring more balanced global growth.”We would be hit very hard by trade wars, by currency wars,” he said.

In separate comments to reporters, Chancellor of the Exchequer George Osborne said he believed there was a real chance of a Doha trade deal over the next year because governments were seeking ways to boost growth.”The world is looking for things that are going to help stimulate demand,” he said. “I think there is a growing recognition that” a trade deal offers “a real opportunity” for growth.

In his remarks, Mr. Cameron also underlined the importance of the G-20 as a global forum. He said the grouping has already shown it is capable of handling crisis. Now it has to “prove itself in delivering the recovery.”

Mr. Cameron was asked about the situation in Ireland, where borrowing costs have soared in recent days over concerns about the country’s fiscal situation. He said he “would applaud” the actions Ireland has taken so far to deal with the crisis and the actions its government has pledged to take.

But he drew a distinction between the economic challenges the U.K. and Ireland face, saying the “one key difference” is that the U.K. isn’t in the euro zone and therefore has greater policy flexibility. Britain is currently pursuing an ambitious fiscal-consolidation plan, just as Ireland has done over the past couple of years. The U.K. opposition Labour Party has warned that the U.K. economy, like Ireland’s, could be pushed back into recession by a combination of spending cuts and tax rises. However, Mr. Cameron said “deficits are dangerous” and that governments “simply have to deal with them.”

He also commented on the breakdown of talks over next year’s European Union budget. He said the U.K. and other major European governments will stick by their insistence that the budget should not lift by more than 2.9% next year.

And if the breakdown of talks between the European Council and the European Parliament means the budget ends up frozen, he would welcome that.

Earlier Friday in Seoul, Mr. Cameron met with French President Nicolas Sarkozy, German Chancellor Angela Merkel and Italian Prime Minister Silvio Berlusconi to discuss the EU budget situation. In a briefing Friday, Mr. Osborne said the four leaders had pledged they wouldn’t except an increase in the EU budget of more than 2.9%. Read More »

About Real Time Economics

Real Time Economics offers exclusive news, analysis and commentary on the U.S. and global economy, central bank policy and economics. Send news items, comments and questions to the editors and reporters below or email realtimeeconomics@wsj.com.